Telkom (TKG) H1 2025 (Q&A) earnings summary

Executive summary

• Data-led strategy and cost optimisation drove strong operational and financial performance, with revenue up 1.9% to R21.4 billion and adjusted EBITDA up 18.3% to R5.6 billion, resulting in a margin of 26.2%.

• Free cash flow turned positive at R768 million, supported by smart capex, asset disposals, and improved working capital.

• Mobile business outperformed, with service revenue up 10% and subscribers rising 24.6% to 22.8 million.

• Monetisation of non-core assets, including property sales and Swiftnet disposal, strengthened the balance sheet.

• Retirement fund converted to a defined contribution plan, derecognising a R42.3 billion liability and incurring a one-off R618 million loss.

Financial highlights

• Group revenue from continuing operations grew 1.9% to R21.4 billion, with mobile service revenue up 10% to R10.2 billion and fibre data revenue up 15.5% to R3.7 billion.

• Adjusted EBITDA increased 18.3% to R5.6 billion, margin up 3.6ppts to 26.2%.

• Adjusted HEPS rose 68% to 262.6c, and adjusted profit after tax increased 80.3% to R1.4 billion.

• Free cash flow improved to R768 million, up 260.7% year-over-year.

• Net debt reduced by R2.1 billion to R14.8 billion, with net debt to adjusted EBITDA at 1.3x.

Outlook and guidance

• Medium-term guidance targets low to mid-single digit CAGR for revenue and EBITDA, capex intensity of 12–15%, and net debt to EBITDA at 1.5x–1.9x.

• Dividend policy set at 30%-40% of free cash flow, with board discretion at year-end after debt reduction and capex priorities; no interim dividend.

• Margin guidance targets 26-28% over the next two to three years, balancing efficiency and digital investment.

• Focus remains on disciplined execution of the data-led strategy and reshaping for a digital future.